IMPORTANT NOTICE: Please note that the Product Disclosure Statement (PDS) for the RARE Infrastructure Value Fund - Hedged has been combined with the PDS for the RARE Infrastructure Value Fund - Unhedged, Issue Number 1 dated 30th-June-2011. The RARE Series Infrastructure Value Fund and the RARE Series Emerging Markets Infrastructure Fund will also moved  to a new Product Disclosure Statement (Issue 3, dated 30th-June-2011). Any applications submitted on or after this date must be completed on the new application form.

Please click here to view changes to the transaction costs (buy/sell spreads) for the RARE Pooled Funds, effective for any applications and redemptions received from Monday 12th December 2011.

Home | RARE Infrastructure Value Fund Market Commentary – April 2010

RARE Infrastructure News

RARE Infrastructure Value Fund Market Commentary – April 2010

May 21 2010

April started strongly with global markets up +3% by 14 April. However adverse news on Goldman Sachs and Europe meant markets finished flat (developed markets (MSCI World up +0.3%) and Emerging Markets (MSCI EM Local) down 0.2%

Despite what appears to be strong US economic recovery markets are very focused on Greece and peripheries, possible indictment of Goldman Sachs and potential Chinese property bubble. From an infrastructure perspective stocks have held up well, with the exception of southern Europe.

 Infra Regulation. The Italian energy regulator AEEG issued a draft review for gas storage regulation. This document confirmed the attractive incentives available for investments that develop new storage capacity within the country, a 4% premium on top of the base returns (currently 7.1% pre-tax real WACC) for a period of 16 years. This draft is seeking consultation prior to the final determination being issued.

 Infra M&A. E.ON (German, Utility) sold their US power and gas business to PPL Corporation (US, Utility) for US$7.6 billion, which was higher than market expectations and at an EV/EBIT multiple of about 15 times. This transaction pushed E.ON’s disposals above their target for €10 billion by the end of 2010. Edf received offers for its UK electric business, with an announcement expected in the next few months. TCL (Australia, toll road) was cleared by competition authorities to bid for the failed Lane Cove Tunnel project. A Vinci (France, toll road) led consortium reached financial close on the first Russian toll road (Moscow to St Petersburg) valued at ~US$2b.  Forth Ports (UK, ports) rejected a third takeover bid that valued the company at 14.8x consensus EV/EBITDA.

 Infra Funding. Many Unlisted funds closed their capital raisings, with US11.7b raised YTD compared to US9.4b raised in all of 2009. ASF (France, toll road) issued €500m 10yr bonds @ ~4.1% (around 80bps over swap) and EdF (France, electricity) issued €1.5b 20yr bonds @ ~4.6% (around 95bps over swap).  The rating agency S&P unexpected downgraded Abertis (Spain, toll road) from A- to BBB+.

Companies in our universe continue to have access to the capital markets.

 Other Infra News. IATA indicated that the volcanic ash disruption will cut ~4% of April passenger traffic. RARE expects 0.5-2% expect impact on annual traffic.